Optimal Group announced the purchase of land in the state's North on Wednesday.
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The Victorian-based energy solutions supplier bought two hectares of land in Westbury.
The $55 million investment is still pending a final investment decision by Optimal Renewable Gas, which is an Optimal Group subsidiary, as well as by BOC.
The latter business is a leading gas and engineering company that belongs to multinational chemical conglomerate, Linde.
The joint endeavor comes after the two company's signed a memorandum of understanding in November.
The agreement is set to allow the businesses to explore the development of Australia's first bio-liquid-natural-gas facility.
Bio-LNG is a biofuel made by processing organic waste flows, such as organic household and industrial waste, manure, and sewage sludge.
It can be used in a variety of ways including as vehicle fuel, as well as for heating and electricity generation.
BOC already supplies LNG to industrial customers in Tasmania through its subsidiary in Launceston, Elgas.
That commodity is refined at their micro-LNG plant, which opened in 2012 and is located adjacent to their latest property purchase.
According to Optimal Group's chief executive, Craig Dugan, the new biogas plant is expected to provide biomethane to the company's micro-LNG plant.
He said the product would then be processed into bioLNG and distributed to customers in several industries.
"Our customers are urgently seeking a solution to their thermal energy requirements and biogas offers them a commercially and technically proven alternative whilst solving Australia's need to divert putrescible waste from landfill," he said.
"The site is perfect for the development ... it will allow us to begin preliminary work on our approvals while we continue to work with the local Tasmanian food, agriculture, and aquaculture industries to secure feedstocks."
Meander Valley mayor Wayne Johnson said the bioLNG plant had been on the drawing board for the Westbury industrial site for the four years he had been at the council, and said the proposal was first raised prior to him starting there.
"It's a great opportunity for Tasmania to add another renewable energy source to what we do, and also we can start to feed some of our green waste into it, potentially doing away with 100,000 tonnes of waste that goes to landfill every year," he said.
CR Johnson did not disclose whether the council's food and organic waste would be supplied to the plant, however, he said "everything should be on the table as far as what can go into the plant".
Optimal Renewable Gas chairman Dr John Hewson said the company would work hard to ensure biogas played a significant role in greening gas grids and providing a path to net zero for many existing gas users.
While in Launceston announcing another federal Labor pledge, Shadow Minister for Climate Change and Energy Chris Bowen said bio-fuel had the potential to play a role in Australia's energy mix going forward.
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